Dominion Energy (D) shares are soaring in premarket trading Monday after the company announced it will merge with NextEra Energy (NEE) in an all-stock deal that creates the world's largest regulated electric utility. The combined company will be worth roughly $400 billion, according to the Financial Times.
Here's how the deal works: Dominion shareholders will receive 0.8138 NextEra shares for each Dominion share they own. That means NextEra shareholders will own about 74.5% of the combined company, and Dominion shareholders will own about 25.5%. The transaction is structured as a tax-free stock-for-stock exchange, and the merged company will keep the NextEra Energy name and trade under the ticker NEE on the New York Stock Exchange.
Both boards have unanimously approved the deal, which is expected to close in 12 to 18 months, pending regulatory approvals. As of March 31, NextEra had about $2.47 billion in cash and cash equivalents on hand.
Leadership will be a blend of both companies: John Ketchum will serve as Chairman and CEO of the combined entity, while Robert Blue will become President and CEO of regulated utilities and also join the board.
What the Combined Company Looks Like
The merged utility will be a powerhouse. It will have roughly 110 gigawatts of generation capacity across multiple energy sources, making it the largest regulated electric utility business in the world and a major North American energy infrastructure platform.
More than 80% of the company's earnings will come from regulated operations, concentrated in high-growth U.S. states. That stability supports an expected 11% annual growth in regulated capital employed and 9%+ earnings per share growth through 2032. The transaction is expected to be immediately accretive to adjusted EPS, with long-term growth of 9%+ through 2032 and roughly 9%+ through 2035 compared to NextEra's 2025 base.
The company also plans to target 6% annual dividend growth through 2028, with payout ratios expected to fall below 55% by 2030.
Customer Benefits and Synergies
As part of the deal, the combined company plans to provide $2.25 billion in customer bill credits across Virginia, North Carolina, and South Carolina over the two years following the close. That's a nice sweetener for regulators and customers in those states.
The combined platform also has a pipeline of more than 130 gigawatts of large-load opportunities, positioning it to benefit from surging electricity demand driven by data centers, AI, and electrification. The company says it can meet that demand while maintaining affordability through infrastructure investment and operational efficiency.
What Dominion Shareholders Get
In addition to the stock swap, Dominion shareholders will receive a one-time cash payment of $360 million at closing. They'll also continue to receive their regular dividends until the deal closes.
Dominion shares were up 14.81% at $70.87 in premarket trading Monday, hitting a new 52-week high.
